In a rare regulatory move, Sebi has restrained PNB Housing Finance from going ahead with shareholders' voting on the proposed Rs 4,000 crore-deal with Carlyle group and directed the company to carry out the valuation process as per the relevant legal provisions.
The watchdog said the resolution regarding the deal, which was to be put for shareholders' vote on June 22, was "ultra-vires" of the company's Articles of Association (AoA).
The transaction, which has come under the lens of Sebi and Reserve Bank of India (RBI) following concerns raised in certain quarters, including by a proxy advisory firm, would eventually see private equity major Carlyle group taking control of PNB Housing Finance, which is a subsidiary of Punjab National Bank.
The company's meeting is scheduled for Tuesday (June 22) to take up the matter for approval of the shareholders.
"The current resolution bearing item no. 1 (issue of securities of the company and matters related therewith) of EGM notice dated May, 31, 2021 is ultra-vires of AOA and shall not be acted upon until the company undertakes the valuation of shares as prescribed under 19(2) of AOA, for purpose of preferential allotment, from an independent registered valuer as per the provisions of applicable laws," PNB Housing Finance said in a late night filing referring to Sebi letter to ensure compliance.
The company, promoted by PNB, said it had received the letter from Sebi on June 18, 2021, calling upon the company to comply with the legal provisions in the matter. The said report shall be considered by the company's board while deciding on the preferential issue of shares and warrants, Sebi has asked.
"The company and its board of directors have considered the Sebi letter, and continue to believe that the company has acted in compliance with all relevant applicable laws, including the applicable pricing regulations prescribed by Sebi, and the AOA of the company, and that such preferential allotment is in the best interests of the company, its shareholders and all relevant stakeholders," PNB Housing Finance said in the filing.